Dispatches - The Indian Miracle? (2007)

[TenjikuKensei]

I really want to get to the bottom of what is driving the Indian economy. Help and opinions would be appreciated

true_indian #26 probably has the correct answer. The Indian economic growth is fueled by consumer demand; not external but internal. As more people move into the middle classes, they create demand for goods and services; which in turn generate demand for products.

If I remember correctly, about 80-85% of Indian economic growth is driven by this demand. The additional advantage of this is the fact that such a domestically driven economy is far less prone to the tidal shifts of the global economy.

The recent economic troubles faced by the world were weathered comparatively easily by India due to the above mentioned reason.

 

[huzihaidao12]

true_indian #26 probably has the correct answer. The Indian economic growth is fueled by consumer demand; not external but internal. As more people move into the middle classes, they create demand for goods and services; which in turn generate demand for products.

If I remember correctly, about 80-85% of Indian economic growth is driven by this demand. The additional advantage of this is the fact that such a domestically driven economy is far less prone to the tidal shifts of the global economy.

The recent economic troubles faced by the world were weathered comparatively easily by India due to the above mentioned reason.

Meaningless, we are completely domestic demand 30 years ago, so what? I just want to tell you, the Chinese economy really take off after joining the World Trade Organization.

 

[true_indian]

Meaningless, we are completely domestic demand 30 years ago, so what? I just want to tell you, the Chinese economy really take off after joining the World Trade Organization.

You are clueless. If just by joining WTO one could develop, then there are 153 countries in it, but you wouldn't say there are all developed, would you? Most of the african countries are in it too.

 

[huzihaidao12]

You are clueless. If just by joining WTO one could develop, then there are 153 countries in it, but you wouldn't say there are all developed, would you? Most of the african countries are in it too.

Well, you do not know what I want to say, so I do not continue.

 

[below_freezing]

true_indian #26 probably has the correct answer. The Indian economic growth is fueled by consumer demand; not external but internal. As more people move into the middle classes, they create demand for goods and services; which in turn generate demand for products.

If I remember correctly, about 80-85% of Indian economic growth is driven by this demand. The additional advantage of this is the fact that such a domestically driven economy is far less prone to the tidal shifts of the global economy.

The recent economic troubles faced by the world were weathered comparatively easily by India due to the above mentioned reason.

80% driven by internal demand, but the problem is, India's economy is currently not capable of satisfying this demand.

 

[TenjikuKensei]

80% driven by internal demand, but the problem is, India's economy is currently not capable of satisfying this demand.

Well, It might not be up to the mark, but it does portend a far bigger economic growth for India when it gets some of the infrastructure deficiencies alleviated.

With Indian planning to invest nearly 1-1.5 Trillion $ on infrastructure over the next decade, the true potential for growth will be unleashed from the shackles which hold it back today. Indian economy is indeed a miracle because it it the second fastest growing economy "in spite of" all the infrastructure challenges it faces.

India, at long last has realized that it lags behind in infrastructure and has taken concrete steps to rectify this problem. For example, as an economist pointed out; India lays more road (in Km's) per day today than it averaged for an entire year about 15-20 years ago.

Is there a lot to be done? yes. Has progress in the thorny issues been slow? yes But now with momentum building; and if the past few years are any indication; India is actually poised to take off in yet another economic miracle that might dwarf its accomplishments of the past decade or so. By the time its infrastructure handicap is rectified, India could easily pass the 10% growth mark. And this is not a piepedream but in fact a rather conservative forecast as it already maintains a 8-9% growth

 

[true_indian]

Well, you do not know what I want to say, so I do not continue.

Please continue..I want to hear all about India from you..You are the expert in all things India and world trade..

 

[huzihaidao12]

Please continue..I want to hear all about India from you..You are the expert in all things India and world trade..

I am not an expert, if you are irony, I think that it is not necessary. I'm still supporters for China and India develop relations.

 

[indushek]

I am seeing that only expats or non-Indians are commenting on this thread so i am going add my bit.

The reason India is growing is because of private Individuals and availability of Cheap labour in educated fields. This was the scene in 1995+ years to 2000, once the people understood that these ITES or IT jpbs could pay more lot of people sent their children in to these fields. Venture capitalists from US are another reason which brought recognition. Regarding manufacturing and Indian workers being not able to meet the global standards, there is a story for this too.

The CPI (Communist Party of India) and other communist ideologues along with government were another reason for manufacturing not developing much. U see in India there are workers unions even today there are for every government Units and these will negate any kind of better management practises that are going to be implemented as they feel empowerment factor is lost. Actually the reason behind is the relation between these labour unions and political parties. The reason all the government units ran on losses and took subsidies from government while the Public Sector Units (This is also a government unit but only an undertaking actually that is management is done by private parties but government pays the salaries) used to earn profits was because of non existence of political and union nexus only. Prior to 1990 there used be a bandh (shut down of normal life in city so that some section or parties could protest) call by these unions or opposition parties or some times the ruling party themselves which hampered business hugely. Not many people were interested in setting up Industries here because of strong labour unions also along with other factors. The most interesting thing is that leave out the pre - 1990's when the Soviet Union fell and Communism remained on paper as the Chinese also followed capitalist approach to economy long back, do u know the statement of the head of CPI in India they still wanted to continue this way as according to these b@$tards Communism is not dead.

Another thing to be noted is that while the CPI was not able to form government at Center it had and still has sizeable presence across the country, the government in order to not become the bad boy of masses gives in to their silly requests. While saying this its not entirely their mistake but the Constitution provides the framework.

The Government itself is also to blame for the levels of corruption existing now. Out of 60 years of Independence Congress ruled for almost 50+ years. Illiteracy is another problem.While the standard of primary and secondary education is okay the institutes providing higher education that is university level education was not that good and still is so. While the IIT and IIM were established for this sole purpose they ended up providing work force to the west with the brain drain.

Most of these never returned back as in the case of China and India lost two generations of growth. Even now the growth is still being achieved by the Private sector only. Neglect of Infrastructure and existence of other barriers like governments bureaucracy and red tapism along with actual barriers are some of the examples for this.

I would also like to speak of another thing here the Caste system. U see many people think that this is one of the foremost reasons for backwardness. While it is so there is a phenomenon her unknown to outsiders. When India was independent Mr. D.R.Ambedkar launched the reservations system so that these backward castes could benefit. Under this these people are given free education till University level, and in all government jobs they are given almost 40% quota. This is being applied from 60 years. Still there is backwardness why?? One could say this is because of forward castes i.e. elites who are suppressing them. The Truth is that these reservation benefits did not trickle down to the bottom tiers because of politics again.

I will give an example of my state Andhra Pradesh. In politics too the reservation quota for backward castes is provided so that their voice can be heard. In these backward castes there are again some 40 to 50 different castes. My best friend is from the same caste and we have discussions about these things. Do u know that in these backward castes again there is casteism !!!i.e in the backward castes again some castes are termed better than others !!! these people who actually have to fight against the elites fight between themselves. Favouritism by those elected towards their choices have hit this country hard. Politicians are the worst scum on this earth.

There is another feature that is to be explained and on which there has already been discussions going on. You see in 50 years of the total backward castes in India some should have moved in to the middle class right?? but no official sensus is there which recogises the BCs moving to better levels and so universal implementation of the reservations continues i.e people who have already benefited also want to avail these benefits. These people are backward actually only according to this caste but not by their economic status. Factually their children should not be applying for reservation status as they can afford for the education by themselves but this is not so. Infact some so called elite caste people are registering themselves (as they are really suffering from unemployment and poverty but are not entitled for free education) falsely under BC status, this shows the mis use of benefits to certain sections. Infact it has become a fad for sections of people to stage protests and agitations to register their community under backward castes to avail these benefits. This reservation has become a double edged sword.

All said and done there is realization now amongst all groups that their children should have some kind of education which is the foremost requirement for development. There is also initiatives being taken by govenrment to assess the economic status of people as this could be used in future. UIN scheme (Unique identification number) is being launched (curently in a testing phase) which will be like a social security number sort of thing for each citizen of this country. Surprisingly it is a private organization CEO who is working on this government project. Mr.Nandan Nielkani was the CEO of Infosys.

 

[indushek]

I would also like to calrify that my reason for posting for such a long reply is to show the intricacies involved on the subject which is a laughing matter to many here and also taken up whenver they want to malign my country. This is the reason why i am proud of my country inspite of these cancers people here want to grow and by God's grace we will achieve our right place under the sun. This is not a fanboy comment. This is the ultimate truth.

 

[huzihaidao12]

I would also like to calrify that my reason for posting for such a long reply is to show the intricacies involved on the subject which is a laughing matter to many here and also taken up whenver they want to malign my country. This is the reason why i am proud of my country inspite of these cancers people here want to grow and by God's grace we will achieve our right place under the sun. This is not a fanboy comment. This is the ultimate truth.

That is fact? Part of the facts. All you said are the facts, part of the facts. India hierarchy (ethnicity) was tight, deeply rooted in Indian society.

 

[ThatDamnGood]

The CPI (Communist Party of India) and other communist ideologues along with government were another reason for manufacturing not developing much. U see in India there are workers unions even today there are for every government Units and these will negate any kind of better management practises that are going to be implemented as they feel empowerment factor is lost.

I would also like to speak of another thing here the Caste system. U see many people think that this is one of the foremost reasons for backwardness.

The CPI in the Tamil states were also responsible for the high standard of living like literacy rates, etc. Unions are important, the worker class do get abused but also, the worker class is quite capable of abusing its powers. Same for the capital class. The Germans appear to have found a good sweet spot in this aspect.

If India can end the caste system, the devas will favour India again.

 

[luckyyy]

after farmers won't return their previous loans , the public & private sector banks won't land them money again....that's make farmers to take cradit from local landers at very high rates , if then a farmer won't return loan these local landes harress the farmers in various ways ...few farmers did commit suiside in 2007...

later that year , the govt wavedoff 50000cr($12bn) of farmers loan accross country , to make farmers make a fresh start...

hopefully thing are better today...

 

[RobbieS]

The CPI in the Tamil states were also responsible for the high standard of living like literacy rates, etc. Unions are important, the worker class do get abused but also, the worker class is quite capable of abusing its powers. Same for the capital class. The Germans appear to have found a good sweet spot in this aspect.

If India can end the caste system, the devas will favour India again.

The CPI is in Kerala and not in Tamil Nadu.

And the communists in Kerala did pretty much the same thing as their bretheren in Bengal. They let talent fly away by not developing the industrial sectors.

And to an outsider, the caste system might seem like the cause of all evils in India. Well, its not.

 

[huzihaidao12]

And to an outsider, the caste system might seem like the cause of all evils in India. Well, its not.

Should be part of the reason. India's problem too much, you even can not take a clear resolution.